Financial instruments have become a significant component of the global economy. In a typical transaction involving a financial instrument, two parties enter into an agreement to deliver, at an agreed upon date and time (or dates and times), either an amount of a specified currency, or a specified currency in an amount to be determined at a later time based on an agreed upon methodology. The form of the financial instrument varies depending on the nature of the economic terms of an underlying transaction. In most cases, the financial instrument, which comprises the terms of the two parties' agreement on the economic terms of the transaction, is confirmed and evidenced in writing. At an agreed upon date and time, the parties transmit payment instructions reflecting the terms of the financial instrument to a mutually agreed-upon financial institution, and the payment instructions are matched and settled. Settlement of payment instructions often involves the delivery of an amount of a specified currency (or amounts of specified currencies) arising from the transaction.
In many cases, current market practices for performing confirmation and/or settlement are dependent on a series of disparate methods and practices. The parties involved often perform confirmation and/or settlement using their own respective idiosyncratic methods, and often employ procedures for confirmation that are separate and distinct from the procedures used for settlement. In addition, the methods and processes used may differ depending on the form of the financial instrument involved.
Performing these procedures manually and without universally accepted procedures introduces a significant amount of inefficiency and risk into the financial markets. There is a need for improved methods and systems for facilitating the settlement of payment instructions related to financial transactions in the global foreign exchange markets.